Because money is information, and the messages sent by the monetary economy dictate in hard, clear terms the actions of billions of people, naturally humans have taken great pains to develop means to keep this information as pure and uncorrupted as possible. If an engineer orders a mechanical shaft of "500 millimeters," and the shop produces one of 500 millimeters, but due to fluctuation in
the meaning of millimeter it is 10 percent shorter than the engineer desired, both the engineer and the machine shop have unable to cooperate productively. The information contained in the phrase "500 millimeters" has become corrupted, meaning different things at different times. The engineer may decide to machine the parts himself, the machinist to take up engineering. The circle of exchange is broken, and the productivity of both decline.

Throughout history, humans have sought the most stable money attainable, because stable money, or uncorrupted information, allows greater productivity and prosperity, while unstable money, or corrupted information, cripples productivity and prosperity. It is impossible to improve the system's productivity by corrupting the information that enables it to function. Such a corruption may result in more production -- a greater volume of goods and services, a greater number of hours worked or employees hired, a blip in statisticians charts -- but much of the increased production will be wasted, or the greater effort will produce less results, and thus true productivity declines.

There have always been those who have sought to twist and manipulate the monetary system, because any change, though it hobbles the smooth operation of the overall extended order, provides a benefit for one group or another. War enriches weapons makers. Crime provides a livelihood for police officers, lawyers, and prison keepers, and disease is the bread and butter of doctors and undertakers, and there are those who can benefit from monetary instability and devaluation. Debtors benefit at the expense of creditors. Exporters benefit at the expense of importers. The unemployed benefit at the expense of the employed.

Historically, governments are the prime offenders, the institution with both the motive and the ability to carry out the deed, and many industrial or social groups are always ready to entice the government into manipulating the currency for their benefit. But governments rest on the approval of the entire citizenry, not just one part, and no government can act at the citizenry's expense indefinitely and remain in power. Democratic governments can be cleansed by the vote, and the members of less flexible political systems win eventually resort to assassination, civil war, emigration, military coup, or secession.

Today the forces for a sound currency are again ascendant. Governments and central bankers around the world today agree unanimously on the desirability of stable money, ever more so after some monetary disaster has reduced yet another economy to smoking ruins: Mexico in 1994, Thailand, Korea, Indonesia, and the Philippines in 1997, Russia and Brazil in 1998, Japan throughout the 1990s, Turkey in 2001, Argentina in 2002, Germany in the 1920s, Latin America in the 1980s, and virtually everyone in the 1970s, to name just a very few of the more well-known cases. The governments and citizens cry out together for good money, stable money, boring money, forever the same, supremely reliable, the bedrock upon which the extended order can flourish, not this stuff that wiggles and waggles unpredictably every second of every day, a never-ending chaos that saps the vitality of all countries' economies. On the political side there is near total unanimity. The problem, first, is that nobody apparently knows what exactly this stable money consists of. Second, nobody knows how to accomplish the task of creating and maintaining it.

But even the briefest study of history shows that today's condition of floating currencies is a very new phenomenon. It began August 15, 1971, the day Richard Nixon severed the dollar's link with gold and destroyed the world monetary system, which at the time went under the name of the Bretton Woods system. In the three centuries before 1971, the world for the most part had stable money. After 1971, or more properly after a series of steps in the late 1960s and the early 1970s, it did not. The capitalist economy since the Industrial Revolution, and a long time earlier as well, was based on stable money. The advocates of laissez-faire never ceased to support stable currencies. Their critics, the early socialists and communists, agreed with them on little other than the necessity of a sound unit of account. Floating currencies are not a phenomenon of the free market but the market's inevitable reaction to unceasing currency manipulations by world governments. Since the system today is the exception rather than the rule, it should be easy to find a solution to the monetary problems that plague humanity on a daily basis.

Government money manipulation and floating currencies have appeared since before the birth of Christ; and also since before the birth of Christ, the discontented citizenry has brought to the fore political leaders to return their country's currency to stability. Alexander of Macedonia unified the Mediterranean world under a hard silver coinage; 25 centuries later, he remains known as "the Great." Julius Caesar returned Rome's currency to a gold standard, and he remains an icon of Rome's greatness. Alexander Hamilton helped launch the United States with a gold dollar, and his face today graces the $10 bill. The person who hired him, George Washington, is on the $1 bill. Napoleon returned France's currency to a gold standard, and the French accepted him as their emperor. Lenin returned hyperinflationary Russia to the gold standard, and statues of him were erected throughout the land. Mao Tse-tung returned China to a gold standard, and the country rallied around him. The US. occupation government in Japan returned the hyperinflationary yen to the gold standard in 1949, and the Japanese allied themselves with the country that attacked them with nuclear weapons only three years earlier. Richard Nixon plunged the world into monetary chaos, and he remains the only U.S. president ever torn from office.

Ronald Reagan, the "Teflon president," whose popularity endured through crisis and scandal, came close to returning the dollar to the gold standard in the 1980s, but settled instead for an end to the devaluation policies that dominated the 1970s. Bill Clinton may have learned his lesson: An economic boom based on his administration's strong dollar policy -- abandoning a century-long tradition of cheap dollar Democrats -- put voters in a forgiving mood regarding his other dubious escapades. The voters know that it is by no means certain that future presidents will be so wise.

Chaotic currencies have been stabilized countless times. It has already happened three times in United States history alone -- or five, depending on how you count. The situation today is not unique in that sense, though the challenge facing governments, politicians, and the citizenry today is as great as it has ever been. Until 1971, in all of history the world had never faced a situation where the entire monetary system of the globe had been separated from its traditional metallic anchors. There had always been floating currencies, but never had all currencies floated simultaneously. More than ever, it will take a leader with deep understanding, vision, and backbone to guide a return to monetary stability. That leader would best be an American, since the US. dollar remains the world's leading currency, but might turn out to be European, Chinese, English, Japanese, Russian or Argentinean.

If so, after a number of years the world might drop the floating dollar and adopt the euro, renminbi, pound, yen, or yes, even the ruble. The first US. currency was confetti issued by a government that soon collapsed. For two centuries afterward, "not worth a Continental" was a casual term for worthlessness. It wasn't until the introduction of the gold-linked dollar that the U.S. currency grew to be accepted throughout the world. The British pound had been the world's premier currency for two centuries, but after Britain broke with gold in 1914 and again in 1931, the world abandoned the venerable pound and the dollar rose to world supremacy...